We’re entering yet another week of turmoil in the financial markets and we’re still trying to work our way out of this mess. In the recent days, we continue to see challenges for financial companies and our economy as a whole including:
- The failure of Washington Mutual (the largest bank failure in our nation’s history) and the subsequent buyout by JP Morgan Chase.
- The buyout of Wachovia by Citibank…note that Wachovia did not fail but rather took the opportunity to sell itself before it came to that.
- The $700 billion bailout package made it out of committee on Sunday and headed to the floor for a vote – only to miss approval by The House of Representatives falling 13 votes shy.
So now what? Well, I don’t know where Washington goes on the financial bailout in their effort to “get battered US credit markets working normally againâ€. We continue to hear that without this bailout, the credit markets are coming to a grinding halt – with banks unwilling to lend to businesses, individuals and even to each other. I don’t want to comment on the credit crisis from a Wall Street perspective but I do think it is important today for us as consumers to understand what is happening from a Main Street perspective. So here it is…and let me make this very clear…
Here in Marin, we are still lending on real estate and closing on mortgage loans daily! The media would have you believe otherwise and I can certainly only speak from the perspective of Countrywide/Bank of America (where I work) but it is pretty much business as usual…only with AMAZING rates due to the chaos that continues to swirl around the equity markets.
Last week, Countrywide got very aggressive on jumbo 30-year fixed (yes…jumbo….like loans more than $729,750) as we are pricing below all major competitors right now. We have not seen rates on jumbo 30-year fixed loans this low since before the credit crisis began back in August 2007. Now is the time to grab these – for a purchase or a refinance – as you can borrow up to $3mm with rates around 6.375% with no points!
How long will these rates last? No one knows…but I do know that when Congress gets the bailout figured out (and I suppose eventually they will), that should provide a level of comfort to the equity markets. The potential fallout from that is a shift of funds in the market from mortgage bonds to stocks which would cause mortgage rates to rise. The advantageous low rates are available to consumers now…get ‘em while they are HOT!
Stacey Fleece is a Mortgage Loan Consultant with Countrywide Home Loans in Mill Valley.